Making an Executive Decision

Just recently, I had to make an executive decision on the issue of possession. As real estate investors, we all have heard the age old rule never to make a purchase without getting possession first. However, there are times when sometimes we have to bend the rules a bit and make things work because we are paid to solve problems. Easy as that.

I had a situation come up on a deal where the sellers needed a portion of the funds from the sale to move into their new place. However, in order to get the funds we needed to close on the property first. So, I was left in a bind and a major dilemma. The sellers could not move into their new place until they received the funds from the sale on my deal. Problem was if we closed on the deal they would still have possession until they moved out.

So, I circulated this around to my fellow investors on the boards. I received a lot of feedback. In fact, most of the feedback I received told me ABSOLUTELY NOT to close until I get possession. Many of these investors were seasoned and told me it was the sellers' problem and not mine. Only a few (I think about 2), told me they've done this in the past and sometimes it's gone smoothly but other times the deal has blown up and it took them FOREVER to get the people out.

At this point, I was faced with a major problem. In fact, the seasoned investors on the board took it so far as to scold me to even think of closing without receiving possession. One investor went as far as saying and I quote, "Boy did you screw up."

In any case, I listened to everyone's advice and considered each one carefully. I know people speak from experience and a lot of times history tends to repeat itself. No, I did not want to make the same mistakes as my fellow investors did in the past.

After thoughtful consideration, I came up with a solution. I decided to go ahead and close on the home but hold back 1/2 of the funds until I received possession. In addition, I noted specific dates for move out and a final inspection to be done to my satisfaction along with a liability waiver stating the sellers would not hold me accountable for liability issues on the home from the time of sale to the possession date. (I got this idea from my insurance agent who warned me about liability issues I would have when I closed on the home). Lastly, I included a $100 per day penalty if the sellers did not move out by the possession date. All of this was done in writing. The sellers signed the document and we had it notarized the day of the sale.

So, what happened? Did I get possession by the possession date? Did the deal blow up? I'm sure you all are wondering...

Well, things went smoothly. On the possession date, the sellers did everything they said they would do. I was very happy to see all of the "junk" out of the home and off the front porch. In addition, the home was cleaned as they promised as well as the oven. I was very pleased. I gave the sellers the other 1/2 of the funds, they signed off on my Acknowledgement of Payment Received Form with a notary to make it official. They handed me the keys and were off on their merry way!

Now, could this deal have blown up in my face? Could the sellers have stayed in the home after we closed and not moved out by the possession date? You bet! As with all business ventures, there is always risk. But, you can't let that stop you. The important thing is that you must measure your degree of risk and weigh the consequences.

In this case, the worst thing that could have happened was if the sellers did not move out of the home by the possession date. Then, I would be faced with an eviction situation. Luckily, in my state the laws are very "landlord friendly." Their motto here is, "If you don't pay, you don't stay." So, an eviction would only take 45 days. On the other hand, if I were in a more "tenant friendly" state an eviction could be a nightmare - it's taken at least 4+ months in some states to do a full eviction.

My point is it's good to get advice from others who have had experience. Listen to others and take in account their words of wisdom. However, it is YOU who makes the final decision and YOU must weigh all the risks, benefits and consequences. In the end, it is YOU who must take control of your actions and your future.

Rooting for the Underdog

When I'm not working, I like to watch movies - a lot of movies. There are certain themes that can be found in a lot of movies which seem to work well with larger audiences. One of those themes is rooting for the underdog. We've all heard of the movie "Rocky." He fights, he loses, he fights again....But, in the end he wins. Why? He never gives up.

A lot of people ask, "What makes someone successful?" When I tell them the answer, people are baffled. They think success is measured by brain power and how book smart someone can be. In a way, it does involve brain power. But, what makes someone truly successful is persistance and belief in what they do.

Though I may not have as many years of experience in the mobile home biz as some of my competitors, for some reason the people in my network including the park managers, dealers, other investors, etc. all want to see my succeed. There's just something about the "underdog" we all like naturally. They want to see me working deals and continue to send stuff my way.

Why? I think part of it has to deal with the "people" aspect in this business. People want to work with people they know, like and trust. Since I keep in contact with my network on a consistent basis, they remember me. Not only do they remember me, but they like me as well because I go the extra effort to learn more about them and what else is going on with their lives.

To be honest, most investors are not very "people oriented." So, they do not take the extra efforts that I have made to get to know other people. Yes, they can be successful finding deals and closing on them. But, if they are only interested in those deals and not the people who help them it can only last so long.

I have met many other investors who just do not take the time to incorprate the "people aspect" in their business. This is why some of them can no longer find deals anymore. People always say, "I can't find any deals. Where are they?" They are there. It just requires skill and effort to learn how to incorporate the "people aspect" into their business.

This is why I have taken the time to improve my communication skills. I have studied the areas of sales and marketing and public speaking very closely for almost a decade. I have read many books. Listened to a lot of CDs. Been on many teleseminar calls. Attended many conferences. At time, it can be repetitive. But, sometimes I learn something new.

A friend of mine recently said to me, "Why do you continue to study communication and public speaking? You're already good at it. You don't need it."

I told my friend, "There is always room for improvement. Those who are successful are always learning, no matter how successful they are."

Constant learning is the mark of a truly successful person. That is why we like to root for the underdog. Yes, we will make mistakes in our conquests. But, we will get up and learn from them. Be wary of those who have stopped learning and think they know it all. These are the ones that dominate conversations and like to give advice out to others. In the end, there is always room to learn and improve - no matter how successful one may be.